- First-time homebuyers will probably continue struggling to buy a home for a few more years.
- It’ll likely take until 2025 for first-time buyers to regain market share, a Zillow survey found.
- Those buyers represent just 27% of the market right now, according to the NAR.
It’s still tough out there for first-time homebuyers, and it’s expected to stay that way for a few more years.
Online real estate firm Zillow polled over 100 economists and housing market experts about their predictions for 2022 and beyond. Their findings showed that the frenzied residential real estate market — with its soaring home values and low inventory — probably won’t cool off anytime soon.
This hits first-time buyers especially hard, because they often don’t the cash reserves of other buyers. And in fact, the share of first-time buyers has decreased significantly over the past few years: those buyers made up 43% of the market in 2020, but only 37% in 2021, according to Zillow.
Data from the National Association of Realtors paints an even starker picture: As of January 2022, first-time buyers represent just 27% of the market.
And according to the majority of Zillow’s panel of experts, it’ll take until 2024 or 2025 for the share of first-time buyers in the market to hit pre-pandemic levels once again — and another 18%. First-time buyers will hit 45% or more until 2030, even though millennials will be “aging well into their prime home-buying years before that time,” Jeff Tucker, Zillow’s senior economist, wrote in the report.
In the meantime, first-time buyers are growing frustrated. Courtney Zaelit, a first-time homebuyer from Bedford, Texas, told Insider that she feels buyers like her are at a disadvantage in the current market. Zaelit recently gave up on buying a house after making an offer on her dream home and getting outbid.
“I felt defeated,” she said.
Brianna Lombardozzi, a prospective buyer in Central, South Carolina, told Reuters that the process made her feel defeated too. Lombardozzi recently had four bids rejected and is running out of time to find a home before her lease is up in May, Reuters reported.
And as mortgage rates rise and the median home price hits a record high of $392,000, finding an affordable home can feel extra daunting for buyers: A 20% down payment for a home that price is more than $75,000 right now.
A recent TD Bank survey found that affordability remains the biggest hurdle for potential homeowners, with 46% citing saving for a down payment as the biggest hangup.